Government abruptly cancels plan to increase subsidized fuel prices
Stefanno Reinard Sulaiman
The Jakarta Post
The government canceled on Wednesday its plan to increase the price of subsidized Premium gasoline or the price based on public service obligation (PSO), minutes after Energy and Mineral Resources Minister Ignasius Jonan announced there would be an increase.
The cancellation was confirmed by State-Owned Enterprises (SOEs) Minister Rini Soemarno minutes after Jonan’s statement.
“We need to discuss it first, for now only [prices of] Pertamax series will be increased. Pertamina is not ready [to increase the price of Premium],” she said over the phone.
Read also: Pertamina announces fuel price hike
Rini said her side and state-owned energy holding company Pertamina had not been informed by Jonan about the plan to increase the price of Premium fuel.
During a press conference, Jonan said the government would increase the price of Premium gasoline, the cheapest fuel in the country, by around 7 percent throughout the country.
Jonan said in Nusa Dua, Bali, on Wednesday that the price increase could start as early as 6 p.m. on Wednesday or depending on the readiness of state-owned energy holding company Pertamina to implement the policy.
Jonan said the decision was made after the price of oil reached around US$ 80 dollar per barrel oil, an increase of 30 percent, since January.
“For Java, Madura and Bali the price will be increased from Rp 6,550 per liter to Rp 7,000 per liter. Meanwhile, in other places it will increase from Rp 6,450 per liter to Rp 6,900 per liter,” he said during his visit while attending the IMF-World Bank Annual Meetings.
“I want to ask for people’s understanding [regarding this decision], as after all, a 7 percent increase is much lower than the hike in global oil prices.” (bbn)
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